Even though Apple Chief Executive Tim Cook stated this week that he’d like his company’s products to be made in the U.S., a new report says the roadblocks may be to difficult for Apple to overcome, at least in the short term.
Sam Oliver, AppleInsider:
Unnamed sources in Apple’s upstream supply chain indicated to DigiTimes that moving production lines of Apple products to the U.S. would be a “highly difficult” task for the company in the near future. Almost all of Apple’s products are currently assembled in Asia before they are shipped to the rest of the world.
If Apple did decide to begin assembling it’s products in America, the cost for transportation of their required components would likely be too high for Apple to bear. The report says higher wage rates in the U.S. would also add to costs for Apple.
“Since moving a supply chain from one place to another takes time, while enterprises are mainly concerned about costs, if there is no profitability in moving, the related upstream component makers are unlikely to follow Apple in moving to the U.S.,” the report said.
Most of the components Apple uses in its products are built in China. The proximity to those component manufacturers suppliers offer more than just simple cost savings. In China there are a large supply of highly skilled workers, which offer speed and flexibility that could not be matched at an American plant.
Cook stated in his recent interview at the D10 conference that he would like for Apple to begin building products in America as it once did. He did note that the custom-made ARM processors for the iPhone and iPad are built in the U.S., in Austin, Texas, while the Gorilla Glass used on the iPhones is made by Corning at their plant in Kentucky.
“There’s an intense focus on the final assembly. Could that be done in the U.S.? I sure hope so,” Cook said. “But look, how many tool-and-die makers do you know in America? I could ask them, nationwide, to come here tonight and we couldn’t fill [a few hundred seats in] this room.”